Benifit of cst billing?

I have been purchasing materials @ 2% CST Bills - ie buying goods at 2%CST - and providing supplier with C FORMS.
of late a supplier offered to send me material at 5% CST Billing with no obligation of sending the C FORM to him!
 

Would the materials purchased at 5% CST be legitimate billing (pakka) ? or would it be illegal (katcha) ??

also if i buy a material at Rs.102/- *which included 2%cst and I add my transportation to it - say Rs.1/- and my margine - say Rs.1/- and then 5% VAT (as applicable in my state on the material i sell) am i doing anything incorrect?

Kindly help....

Also what would be the differance in buying material at 5% CST and 5% VAT - from other state ! As i have understood till now - both are illegally billed (katcha) material....please correct me if i am wrong